Digital Brands Group (NASDAQ:DBGI – Get Free Report) and Arhaus (NASDAQ:ARHS – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Analyst Ratings
This is a summary of current ratings and price targets for Digital Brands Group and Arhaus, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Digital Brands Group | 1 | 0 | 0 | 0 | 1.00 |
| Arhaus | 0 | 3 | 6 | 1 | 2.80 |
Arhaus has a consensus target price of $10.78, indicating a potential downside of 15.20%. Given Arhaus’ stronger consensus rating and higher possible upside, analysts plainly believe Arhaus is more favorable than Digital Brands Group.
Valuation & Earnings
This table compares Digital Brands Group and Arhaus”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Digital Brands Group | $7.38 million | 0.09 | -$28.25 million | ($88.79) | -0.01 |
| Arhaus | $1.38 billion | 1.31 | $67.26 million | $0.50 | 25.42 |
Arhaus has higher revenue and earnings than Digital Brands Group. Digital Brands Group is trading at a lower price-to-earnings ratio than Arhaus, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Digital Brands Group and Arhaus’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Digital Brands Group | -768.25% | -561.70% | -90.27% |
| Arhaus | 4.91% | 17.23% | 4.94% |
Risk and Volatility
Digital Brands Group has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500. Comparatively, Arhaus has a beta of 2.29, suggesting that its stock price is 129% more volatile than the S&P 500.
Institutional and Insider Ownership
1.6% of Digital Brands Group shares are owned by institutional investors. Comparatively, 27.9% of Arhaus shares are owned by institutional investors. 0.0% of Digital Brands Group shares are owned by insiders. Comparatively, 1.2% of Arhaus shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Arhaus beats Digital Brands Group on 15 of the 15 factors compared between the two stocks.
About Digital Brands Group
Digital Brands Group, Inc. engages in the provision of apparel products under various brands on direct-to-consumer and wholesale basis. It operates through DSTLD, Bailey, H&J, Stateside, and Sundry segments. The company designs, manufactures, and sells women's apparel, such as tops, sweaters, dresses, jumpsuits, bottoms, sets, jackets, rompers, suiting, sportswear, shirts, jackets, pants, shorts, polos, T-shirts, skirts, athleisure bottoms, denims, and other accessory products, as well as suiting for men. It sells its products under the Bailey 44, Harper & Jones, Stateside, Sunnyside, DSTLD, Sundry, and ACE Studios brand names. The company sells directly to the consumer through its websites, as well as through its wholesale channel in specialty stores, select department stores, and own showrooms. Digital Brands Group, Inc. was formerly known as Denim.LA, Inc. Digital Brands Group, Inc. was incorporated in 2012 and is headquartered in Austin, Texas.
About Arhaus
Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, and other items; and outdoor products, such as outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It offers lighting products, including various distinct and artistic lighting fixtures comprising chandeliers, pendants, table and floor lamps, and sconces; textile products, such as handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, print and digital media, and in-home designer services. Arhaus, Inc. was founded in 1986 and is headquartered in Boston Heights, Ohio.
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